On a grand stage and on a legacy-defining night, Briton Fury began well but was given a standing 10 count and saved by the bell after an Usyk onslaught in the ninth round.
The scorecards gave 115-112 and 114-113 decisions in favour of the Ukrainian, with a third judge scoring it 114-113 to Fury.
It meant Fury, 35, lost for the first time in a 16-year professional career. He will get an immediate opportunity for revenge with a rematch planned for later this year.
“I believe he won a few of the rounds, but I won the majority,” a defiant Fury said in the ring.
“It was one of the daftest decisions in boxing. I’ll be back.”
Usyk takes the WBC belt from Fury, to add to his WBA, WBO and IBF collection.
The 37-year-old remains unbeaten and is the first boxer in almost 25 years to stand tall as the sport’s sole heavyweight world champion.
“Thank you so much to my team. It’s a big opportunity for my family, for me, for my country. It’s a great time, it’s a great day,” Usyk said.
“Yes, of course. I am ready for a rematch.”
Usyk – a former undisputed cruiserweight world champion – prevailed in a fight of two halves at Riyadh’s Kingdom Arena, propelling himself into the conversation to be considered an all-time great.
After a lack of buzz and noise in the arena for the undercard, not unusual for a Saudi card, a crowd of 20,000 that included famous faces such as Cristiano Ronaldo found their voice for the main event.
Usyk – resembling a warrior – made his entrance wearing a striking all-green traditional Ukrainian outfit, his eyes fixated on the ring.
In contrast to Usyk’s sternness, a playful Fury sang and danced to Bonnie Tyler’s Holding Out For A Hero.
He raced to the ring and headed straight to Usyk’s corner and goaded his opponent, to the enjoyment of 2,500 travelling British fans.
As the two champions advanced to the centre of the ring at the chime of the first bell, the painstakingly long wait to crown an undisputed champion was about to end.
Usyk landed a solid left hook and backed Fury into the corner in the first, which the Gypsy King dismissively laughed off.
He responded with two painful-looking uppercuts to Usyk’s midriff in the second. Trainer SugarHill Steward asked Fury for “more body shots” in the corner in between rounds and the fighter obliged.
The height and reach advantage of Fury was posing too much of a puzzle for Usyk to solve, or so it seemed
An uppercut in the sixth staggered Usyk as Lennox Lewis, the division’s last undisputed champion in the three-belt era, and fellow former champions Larry Holmes and Evander Holyfield watched Fury assert his dominance.
Usyk has been guilty of starting slowly in the past, and he began to find success with his left hand in the sixth.
“You’ve got to work now, Tyson,” a member of Fury’s team shouted.
Their concerns were warranted as Usyk caught his opponent with several left hands over the top two rounds later.
A dazed Fury staggered around the ring – seemingly out on his feet – and into the ropes. He was given a 10 count before the bell rang.
This was not the boring, tactical, chess-like match-up some pundits predicted but a barnstormer, living up to the pre-fight hype from fans and promoters.
Another bruising left hand caught Fury in the 11th. The pair touched gloves before the 12th – there was a feeling there was still all to play for.
But it was a spirited Usyk who may have just edged a competitive final round, and ultimately perhaps that got him across the winning line.
October’s lacklustre performance against debutant Francis Ngannou left many wondering if Fury’s best days were behind him.
But he was a conditioned and fit competitor here, and any suggestion of his demise were quashed when he controlled early parts of a close encounter.
His chance of becoming an undisputed champion, however, may not come again soon.
A rematch is in the works for October but it is unlikely to be for all four belts – the IBF plan to strip Usyk as he will not be facing their mandatory challenger next.
“We’ll go back, rest up. I believe I won the fight but I’m not going to sit and cry and make excuses. We’ll run it again,” Fury added.
Fury may be licking his wounds behind closed doors when the dust settles as Usyk’s unshakable will to win and mental toughness prevailed in the Middle East.
The heavyweight world title is considered by boxing lovers as the greatest, most coveted, prize in sport, and the Crimea-born fighter left the ring draped in all four belts across his 6ft 3in frame.
Usyk, who competed as a middleweight as an amateur, showed that size does not all always matter.
